Call for Strong Independent Consumer Protection Agency

New Jersey Rep. Rush Holt and three other House members have asked Congress to establish a sturdy and effective Consumer Financial Protection Agency, which will remain autonomous and help protect Americans from future financial abuses.

According to a news report in the Daily Record, Holt and three other House members have stated that the proposed new consumer protection agency must not be set up in the Federal Reserve as the Senate has proposed. Instead, they say, this should be an independent agency, which has the power to put in writing and implement regulations that will protect consumer rights.

The Senate version of the bill would make the agency subordinate to the Federal Reserve. That, House members say, would defeat the purpose of creating an agency to protect consumers against the type of financial crisis and recession we saw in recent years that dragged the American economy down.

The House version of the bill may be the better bet for consumers because the agency would then have more leeway as well as the necessary resources to be a consumer advocate. It would help prevent consumers, for example, from being tricked into buying a home they cannot afford. The agency will also help make sure that credit card applications are comprehensible and that the terms are fair and reasonable. A group of negotiators from both the House and Senate are trying to arrive at a consensus so a final version of the bill can be passed and this agency to protect consumer rights can be created.